A bold claim has been made: Treasury bills are the true force behind Bitcoin's price fluctuations! This revelation, presented by Keyrock, a crypto investment firm, challenges conventional wisdom and sparks a heated debate.
While many have pointed fingers at the Federal Reserve and central banks, Keyrock's report highlights a different liquidity metric - Treasury bill issuance. This metric, they argue, has an astonishing 80% correlation with BTC prices since 2021, and it leads BTC price movements by a significant eight months.
Here's the intriguing part: every 1% change in global liquidity levels impacts BTC's price by a whopping 7.6% in the following quarter. But not all liquidity is created equal, says Keyrock researcher Amir Hajian.
"When the Treasury increases bill issuance, it's like a financial boost to the real economy, eventually trickling down to risk assets like Bitcoin. When issuance drops or turns negative, that fiscal boost fades," Hajian explains.
And here's where it gets controversial: Keyrock's analysis contradicts the widely held belief that the Federal Reserve's interest rate policies are the primary liquidity drivers. Instead, they predict that global liquidity, influenced by Treasury bill issuance, will impact BTC prices in late 2026 and early 2027.
But there's a twist! Institutions and ETFs have reduced Bitcoin's sensitivity to these liquidity conditions by about 23%. So, while Treasury bills may be the primary driver, other factors are at play too.
And this is the part most people miss: the looming US debt maturity. Keyrock's report reveals that a large chunk of the $38 trillion US national debt is maturing over the next four years. This means the US Treasury will need to refinance at higher interest rates, creating a potential liquidity boost.
"T-bill issuance is projected to reach and sustain $600 billion to $800 billion per year through 2028," the report states.
So, is the Federal Reserve really the liquidity king, or is it the Treasury's turn to shine? What do you think? Share your thoughts in the comments and let's discuss this intriguing crypto-finance connection!
